Electronic books are still in their infancy, comprising an estimated 3% to 5% of the market today. But they are fast accelerating the decline of physical books, forcing retailers, publishers, authors and agents to reinvent their business models or be painfully crippled.
"By the end of 2012, digital books will be 20% to 25% of unit sales, and that's on the conservative side," predicts Mike Shatzkin, chief executive of the Idea Logical Co., publishing consultants. "Add in another 25% of units sold online, and roughly half of all unit sales will be on the Internet."
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"The store model is under pressure, whichever way you look at it," acknowledges Leonard Riggio, Barnes & Noble's 69-year-old chairman and largest shareholder. Over the next three to four years, Mr. Riggio says, a different, more diverse Barnes & Noble retail store will evolve, selling a variety of merchandise and serving as a showcase for digital products.
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Others are less optimistic about the future of brick-and-mortar retailers: "Their time is limited," Mr. Shatzkin says flatly. "I can't see how sales can do anything but continue to erode, and probably at an accelerated pace."
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